Who Deserves a 'Living Wage?'

Safety, productivity, alertness, and quality
are tightly linked with job satisfaction. But
does this mean state governments should
ensure a “living wage”?

The first annual report of the New Jersey
Minimum Wage Advisory Commission, dated
Dec. 21, 2007, has set up what promises to be
a heated debate about the role of states in
ensuring a “living wage” for their “working
poor” residents in the 21st Century and may
set New Jersey on a path to become the bellwether
state in the Northeast for ever-higher
minimum wages. The commission, chaired by
state Labor and Workforce Development
Commissioner David Socolow, recommends
an immediate $1.10 per hour increase in the
state’s current $7.15 minimum wage, plus
automatic cost of living increases, plus
indexing the state’s minimum wage to the
Consumer Price Index for urban consumers
in the Northeast Metropolitan Region.

The recommended $8.25 per hour was the
poverty threshold wage for a three-person
family in 2007, the panel said in its report.
Socolow sided with the commission’s two
organized labor representatives in voting for
the recommendations; the other two commissioners
are business representatives. JoAnn
Trezza, the HR vice president of Arrow
Group Industries, which makes storage buildings,
agreed with raising the state’s minimum
to $8.25 but wants this done in stages, while
the New Jersey Business and Industry Association’s
president, Philip Kirschner, opposed
$8.25 and annual indexing. “Small businesses
that rely on entry level minimum wage
employment simply cannot afford this
increase in a single step,” Kirschner wrote.
Automatic indexing would make New Jersey’s
businesses unable to compete with those in
every neighboring state because they do not
index their minimum wages, he added. (States
that index annually are Arizona, Colorado,
Florida, Missouri, Montana, Nevada, Ohio,
Oregon, Vermont, and Washington State.
Keep in mind, New Jersey has a higher cost of
living and higher housing costs than most of
these.) The federal minimum wage will rise to
$7.25 in 2009.

As Kirschner pointed out, raising New
Jersey’s minimum will eventually affect all
businesses in the state by leading to higher
unemployment payments, temporary disability
payments, and worker’s comp rates.
The end result may be a good swap: fewer
businesses paying more to fewer, but safer and
healthier, workers.

This article originally appeared in the March 2008 issue of Occupational Health & Safety.